‘The high level of basic research and innovation promotes Israeli science-based industries’
Israel’s economy has escaped relatively unscathed from the global economic recession. Gross domestic expenditure on research and development (GERD) fell by just 0.4 percentage points to 4.4% of GDP between 2008 and 2010, maintaining Israel’s global lead for the level of commitment to R&D. Most exposed to the financial turbulence has been the business sector (80% of all R&D), owing to its dependence on world markets for its high-tech exports and venture capital. One development that should have strong repercussions for the country’s economy is Israel’s integration into the Organisation for Economic Co-operation and Development in 2010.
Although the government has recently increased subsidies to business R&D to help it weather the storm, the biggest beneficiary of recent policy changes could yet be the university sector. With scant natural resources, Israel has always cultivated its human resources to drive development. Today, however, this pool is shrinking. The government’s six-year plan to 2017 proposes increasing funding for universities and related research by at least 30%, in order to attract more students and woo Israeli scientists back to Israel from abroad, while diversifying the country’s industrial base. As if to underscore this ambition, Daniel Shechtman from the Technion – Israel Institute of Technology was awarded the Nobel Prize for Chemistry in October 2011 for his discovery of quasicrystals, a new form of matter.
In the following interview, Professor Ruth Arnon, President of the Israel Academy of Sciences and Humanities, deciphers the intricacies of Israel’s unique science system and outlines the challenges it faces in a rapidly changing world.
- Q1 - What explains the drop in Israel’s GERD/GDP ratio from 4.8% to 4.4% between 2008 and 2010?
Preliminary data disclosed by the Central Bureau of Statistics show that the drop in Israel's GERD/GDP ratio is most probably the result of a drop in expenditure on R&D in two key sectors, each of which performed around 30% of R&D in 2008: a cutback of 8.5% in the services sector and of 3% by manufacturing industries between 2008 and 2009.
Statistics on funding of R&D lag behind the statistics on R&D performance. However, we know for sure that by far the greatest part of R&D funding in the above-mentioned sectors is provided by local and foreign businesses, whereas only a small part is financed by the government.
About a year and a half ago, the Council for Higher Education announced the launch of the Israeli Centres of Research Excellence (I-CORE) scheme as part of the government’s six-year plan to 2017. I believe that this is an indication that the trend towards a low government share of R&D funding is reversing. This novel programme envisions the establishment of centres encompassing cross-institutional clusters of top researchers in each field and returning young Israeli scientists from abroad, endowed with up-to-date research infrastructure. Four centres are currently operational and over the next four years the number is slated to reach 30 – covering the full range of natural and exact sciences, humanities and social sciences – with a total budget of 1.35 billion New Israeli Shekels (US$365 million). The I‑CORE project areas are preselected by the management committee on the basis of a call for proposals and the centres of excellence in those preselected areas are themselves selected via a peer review process conducted by the Israel Science Foundation (ISF). I-CORE is funded by the Council for Higher Education, the host institutions and strategic business partners.
The main challenges for Israeli science are twofold. On the one hand, we need to support and promote fields of research in which we already excel and to provide scientists with the means to pursue their work and thrive; in many cases, this will involve building sophisticated infrastructure. The second challenge will be to promote translational research; this is particularly relevant to biomedical research, where both clinical research and pharmaceutical research and drug development are attainable goals (see graphic). For this purpose, it is essential to increase the government share of support for R&D in relation to that provided by private enterprise. Steps in this direction have been initiated by the recent opening of a biomedical and translational medicine division in the ISF.
 The term R&D refers to civil R&D, as defence R&D is classified in Israel.
 The business sector both performs and finances 80% of R&D.
 Startups, Technological Incubators and Commercial Research Institutes, as defined by International Standard Industrial Classification 73